Which of the following is an example of a direct cost for a security initiative?

Loss of productivity due to new security procedures

Purchase price of a new firewall appliance

Increased insurance premiums due to higher risk

Reputation damage from a data breach

What is the primary purpose of a cost-benefit analysis (CBA) in the context of a security project?

To ensure the project complies with regulatory requirements

To identify all potential security threats

To compare the total costs and benefits of the project to determine if it is financially viable

To calculate the exact payback period of the project

A CISO is comparing two security investments with different risk profiles. Investment X has a higher expected NPV but also higher uncertainty in its cash flows. Investment Y has a lower NPV but more predictable returns. The organization is risk-averse and has limited capital. Which approach best incorporates risk into the decision?

Choose Investment X because it has a higher NPV

Choose Investment Y because it has a shorter payback period

Select the investment with the higher IRR

Apply a risk-adjusted discount rate to each investment's cash flows and compare the risk-adjusted NPVs

EC-CouncilAssociate C|CISO

Domain 5Objective 5

Return on Investment (ROI) and Cost-Benefit Analysis ACCISO Practice Questions (Page 4)

Part of the Strategic Planning, Finance, Procurement, and Vendor Management domain, which makes up ~23% of our current practice bank. EC-Council does not publish an official question count, but from its 120-minute exam (~50–80 total, ~12–18 in this domain), expect 2–3 from this objective — we provide 44 practice questions to prepare you well beyond it. (estimate)

44questions here

9free pages

10concepts

Questions 16–20

16foundation · easy
Which of the following is an example of a direct cost for a security initiative?
Select an answer first
17foundation · easy
What is the primary purpose of a cost-benefit analysis (CBA) in the context of a security project?
Select an answer first
18application · medium
A retail company is comparing two security investments: Project A has an expected IRR of 12% and Project B has an expected IRR of 9%. The company's required rate of return (hurdle rate) is 10%. Which project(s) should the company accept?
Select an answer first
19expert · hard
A CISO is comparing two security investments with different risk profiles. Investment X has a higher expected NPV but also higher uncertainty in its cash flows. Investment Y has a lower NPV but more predictable returns. The organization is risk-averse and has limited capital. Which approach best incorporates risk into the decision?
Select an answer first
20foundation · easy
An organization invests $200,000 in a security solution and expects net benefits of $60,000 per year for 5 years. What is the ROI over the 5-year period?
Select an answer first

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Return on Investment (ROI) and Cost-Benefit Analysis ACCISO Practice Questions (Page 4)

Questions 16–20

Which of the following is an example of a direct cost for a security initiative?

What is the primary purpose of a cost-benefit analysis (CBA) in the context of a security project?

A retail company is comparing two security investments: Project A has an expected IRR of 12% and Project B has an expected IRR of 9%. The company's required rate of return (hurdle rate) is 10%. Which project(s) should the company accept?

An organization invests $200,000 in a security solution and expects net benefits of $60,000 per year for 5 years. What is the ROI over the 5-year period?

Keep studying — Strategic Planning, Finance, Procurement, and Vendor Management